The Fed raised interest rates for the fifth time in September. Rising rates are generally a good thing for your savings. Here are some ways to make sure you’re taking full advantage of the rate boost.
You can only take full advantage of rising interest rates if you have your savings in a good spot. Shop around and find a bank or credit union that offers high-yield accounts. We’d suggest checking credit unions and online-only banks first, as they often feature accounts with higher rates than big banks. If you find a credit union with a higher interest rate than you have now, don’t be afraid to make the switch. It might seem like a headache, but when your money grows quickly, you’ll be happy you moved on.
As US News reports, the bond market is especially sensitive to interest rate increases. You might want to invest in bonds, because when interest rates jump, bond prices go down but their yields go up. Currently, a 10-year treasury bond’s yield is almost three times more than it was just a year ago.
Pay Down Debt
While rising interest rates are good for savings, they’re not good for debt that has variable rates, like credit cards. And because experts think the Fed is going to raise rates again, you might want to pay extra attention to paying down debt now before things get worse. Do what you can to funnel funds to your variable debt.